Blockchain, cryptocurrencies and initial coin offerings

Distributed ledgers are technologies that facilitate efficient sharing of data. Common characteristics of these systems are that they:

• use public and private key cryptography
• are peer to peer (distributed); and
• have some sort of consensus mechanism.

Depending on the specific implementation, blockchain technologies offer a number of benefits to users including transparency, immutability and process simplification. Use cases for blockchains span areas as diverse as payments, share trading, identity management, voting and supply chain management.

Cryptocurrencies like Bitcoin and Ethereum are also enabled by blockchains and over the last decade, we have seen some of the most interesting attempts at financial innovation in this area including in relation to central bank digital currencies.

We began looking at the legal aspects of blockchain and cryptocurrencies several years ago, when prospective use cases were theoretical at best. In the intervening period, we have engaged with our clients and with other market participants to follow emerging developments and contribute our perspectives on how existing and emerging legal and regulatory frameworks might be applied to new business models built on distributed ledger technology. We are now seeing our clients move from proof of concept to live applications of the technology, and our experience of this area of technology has grown as the market has matured.

We are pleased to be in the forefront of a number of industry 'firsts' particularly in the field of tokenised securities issuance.